Alpha Bank and Eurobank announced that they have reached agreement for an estimated 37 billion tie-up.
The merge of these two highly complementary private sector banks with substantial synergies and a clear strategic rationale will play a vital role in the economic recovery of Greece, according to a joined statement.
The new group will enjoy an outstanding presence in Southeastern Europe, with an aggregate network of more than 1,300 branches across 8 countries and top 3 market positions in Bulgaria, Cyprus, Romania and Serbia. It will be among the top 25 largest Eurozone banking groups with pro forma total assets of €146 billion and will have the appropriate critical mass to establish it as a reference stock in the capital markets
The exchange ratio will be 5 new Alpha Bank ordinary shares for every 7 Eurobank EFG ordinary shares, while the combined group had 2010 pre-provision income of €2.6 billion on a pro forma basis.
Estimated annual pre-tax synergies of approximately €650 million fully phased within three years, with an estimated net present value of approximately €3.4 billion.
Significantly enhanced capital buffers through a proposed comprehensive capital plan equivalent to approximately €3.9 billion; pro forma Core Tier 1 ratio 2 of the combined entity is expected to be 14.0% incorporating the capital plan measures announced and the impact of the Private Sector Initiative.
Diversified shareholder base underpinned by three core shareholders representing the interests of the Costopoulos family, the Latsis family and Paramount Services Holding Ltd (a Qatari investment fund, already a shareholder of Alpha Bank led by Qatar’s royal family) each of which supports the proposed merger and capital plan.
The Board of Directors and the Executive Committee will be chaired by Yannis Costopoulos and the management team will be led by two co-CEOs, Demetrios Mantzounis who will be in charge of control and central functions and Nicholas Nanopoulos who will be in charge of business functions.
ASE Posts Biggest Gains in 23 Years Amid Banking Deal
The Athens Stock Exchange welcomed enthusiastically the deal between Alpha Bank and Eurobank, as the benchmark ASE Index climbed the most in more than 23 years.
Greek banks’ index skyrocketed with profits of 20% at 620 units, while the General Index regained 950 units with profits of 8%.
Hellenic Postbank, Piraeus Bank and ATE Bank soared with profits of 28.57%, 26.79% and 25.45% respectively, while Marfin Popular Bank and National Bank gain around 24%. Bank of Cyprus rises by 18.10%, while shares of Eurobank and Alpha Bank are suspended due to the ongoing deal.
In, FTSE20, MIG gained 20% at €0.36, while Ellaktor, Mytilineos and PPC posted double digit profits.
The General Index closed at 1.006,59 units with profits of 14,37%.
(source: capital)
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